ES Risks and Shareholder Voice

58 Pages Posted: 26 Nov 2018 Last revised: 26 Jun 2019

See all articles by Yazhou He

Yazhou He

Oxford University Centre for Corporate Reputation

Bige Kahraman

University of Oxford - Said Business School; Centre for Economic Policy Research (CEPR)

Michelle Lowry

Drexel University

Date Written: June 2019

Abstract

Over the 2004 – 2016 period over 20% of all shareholder proposals relate to environmental and social (ES) issues, and slightly more than half are sponsored by asset management companies. Support for these proposals has increased substantially over this period, but it remains the case that virtually none receive the minimum threshold support rate to pass. We find that failed ES proposals with higher investor support significantly predict future firm risk, measured in extreme negative stock returns and real events such as negative ES incidents. Examining the detailed records of mutual fund votes, we uncover that myopia within investors and management contributes to these proposals not receiving greater support.

Keywords: shareholder proposals, voting, mutual funds, environmental, social

Suggested Citation

He, Yazhou and Kahraman, Bige and Lowry, Michelle B., ES Risks and Shareholder Voice (June 2019). Available at SSRN: https://ssrn.com/abstract=3284683 or http://dx.doi.org/10.2139/ssrn.3284683

Yazhou He

Oxford University Centre for Corporate Reputation ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Bige Kahraman

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Michelle B. Lowry (Contact Author)

Drexel University ( email )

Philadelphia, PA 19104
United States
215-895-6070 (Phone)

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